The UK Supreme Court has this morning upheld a lower court ruling determining that courts in England and Wales are able to set a global fair, reasonable and non-discriminatory (FRAND) rate when the licensor and licensee cannot agree on terms.
Today’s unanimous ruling, handed down via video link, upholds decisions from the England and Wales High Court (in 2017) and Court of Appeal (2018).
The ruling also clarifies that in appropriate circumstances, courts in England and Wales have the power to require that a company, which intends to implement standard technology in the UK, enters into a worldwide portfolio licence of a patent owner’s standard essential patents (SEP).
The dispute began when Unwired Planet brought proceedings against Huawei accusing it of infringing several of its SEPs related to 3G and 4G standards. The case was subsequently jointed with proceedings brought by Conversant against Huawei and ZTE.
David Knight, partner at Fieldfisher in London, says the decision is a "final blow" to Huawei and is likely to have far reaching consequences for the global negation and litigation of SEP licenses.
“Firstly, it means that the UK can make decisions about worldwide licenses and has essentially turned the UK into a very selfish one for the IP industry in the UK as it could become a very good forum to bring a separate infringement claim that would have global implications,” he says.
Simon Ayrton, partner at Powell Gilbert, which represented Huawei in the case, says the Supreme Court has firmly established the UK’s place as an attractive forum for patentees with global SEP portfolios.
In particular, he says, those who are seeking to establish their licensing programmes will welcome confirmation that the courts (in England and Wales) are ready and willing to set the terms of a FRAND licence and award an injunction if that licence is not taken.
Gary Moss, head of EIP Legal, which represented Unwired Planet and Conversant, says: “When we started on this journey [in 2013] little did we think that we would end up in the highest court in the land with the eyes of the global IP and telecoms worlds upon us.
“Along the way we have gone through 12 major trials and appeals and innumerable interim court hearings. We always believed in our clients’ case and seven years later we are delighted to have our belief endorsed by the Supreme Court.”
Today’s judgement also found that the High Court and Court of Appeal correctly interpreted the Court of Justice of the EU’s (CJEU) ruling in Huawei v ZTE, and that the CJEU did not determine mandatory requirements that must be followed for every case, but instead established “a standard of behaviour against which both parties’ behaviour can be measured to decide in all the circumstances if an abuse has taken place”.
A spokesperson for Unwired Planet said it is pleased with the court's decision.
“We look forward to continue working with other manufacturers to offer licenses to our patents under this global FRAND framework and conclude negotiations in a timely manner,” the spokesperson added.
Boris Teksler, chief executive of Conversant, said the decision "reflects the court’s deep understanding of the issues that affect our sector and encourages us to drive this industry forward".
